The Indian Government ban on imports seeks to benefit Make In India while slowing global tech manufacturers outside India from increasing inputs with higher demand in the Indian market. The results and benefits for other Indian enterprises is less clear.
India bans imports of compute devices without a license. Make In India will be helped by this ban. Consumers and computer buyers may not be happy with higher prices and less choice. Dynamic India’s high-tech global businesses may see harms without access to the latest devices and servers.
Less clear is the changes for other Indian enterprises. Consider just the development of AI artifacts, and the outsource research and development at global scale. Investments in AI-compute centers, in the USA, EU, Japan, and China; are now measured in the hundreds of thousands of GPU chips with hundreds of thousands of CPU chips and petabytes of DRAM memory. Very large compute capacity is deployed to competitive races to build new AI by executing pipelines leading to machine learning then inference models.
For global Indian service enterprises the effects are less direct. For high productivity Call Center, Business Process, Outsource engineering, and other export business modes, banning new capacities and capabilities can only reduce their competitiveness. The expanded data centers and workstations also decrease costs and offer increases in productivity that directly improve competitiveness in global competition. Even the “administrative costs” of pursuing special licenses do not come “free”.
Reduced capacity and capabilities lower productivity for compute dependent tasks like: fluid dynamics modeling, computational pharma research, vehicle structural dynamics, semiconductor design, and genetics. Enterprises will see longer schedules, fewer research cycles, and less interactive tools. These adjustments will reduce the attractions of having any of this work done in India by global enterprises.
For Indian enterprises this reduces their ability to compete against Chinese, USA, EU, and Japanese enterprises. These effects are not as visible as opening a new factory in a politically competitive Indian State. These effects are trading a Dynamic India’s possible future gains against a near term improvement in employment.
In this short series EkaLore will look at the likely results of the Indian Government ban policy.
For additional analysis and notes on a Dynamic India please see http://www.ekalore.com/india-business
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